How much do we charge for accountancy fees is a question we are often asked!
Our article below goes into detail the whole area of fees. Please also check out our video below where we discuss fees.
Today accountants charge in so many ways that it can be confusing for many business owners. What should be a simple exercise often ends up in confusion when a surprise bill drops on your doorstep and you find out that what you thought was included in your fee is an extra. Another common occurrence is that the service just doesn’t live up to the hype. You get told you will get a comprehensive service and then the tax bills hit and you sit there wondering is this right? Was there a better way that your affairs could have been dealt with to avoid this tax liability? The accountant has prepared your tax return but hasn’t provided you with any advice as your service offering doesn’t include time for planning.
Comparing accountancy fees can be like comparing apples with oranges.
How are accountancy fees usually calculated?
Here are the classic ways accountants charge:
Purely on a time basis. This is historically how most clients use to charge and to be honest we have a number of old clients who we still charge on this basis. They trust us implicitly and expect us to take whatever time is necessary to provide them with the best possible service. However for most new clients this means that you have no certainty as to what your fees are going to be.
You are quoted for specific services. This is probably the most common way accountants now charge. The headline figure sounds great but unfortunately its not till much later you find out that a lot of things you thought would be included aren’t! Items such as tax planning, your accounts software subscriptions, telephone support, fee protection insurance etc… The list goes on and on! This method is great if you are really clear about what you need but for many business owners they only find out what they need when the problems start!
Similarly many accountancy firms will commoditise their services into nice neat packages. Their website’s advertise a number of fixed price packages with a list of all the services that are included. You look at this and think what a bargain! Your business which may have 1000 transactions per month and an annual turnover of £500K can have everything including your bookkeeping done for £200 per month. You tell your friend who has 5 transactions per month and the same annual turnover of £500K to go to the accountant and he gets charged exactly the same figure. He looks at it and says this looks expensive. For the accountant by setting a fixed fee there will always be winners and losers. The question is however do you believe you will get the same level of service if the accountant makes peanuts per hour on your job compared to what he could make on your friend’s?
Some accountants will invoice purely on value. This is not normal for most accountancy services but if the accountant is carrying out a project they may say that the tax savings are X therefore we will charge 20% of X.
Finally there is how we and few other accountants charge. We believe your business and tax requirements are unique to you and that the fee should reflect the work required to provide you with the level of service you require. We will talk to you to determine your goals, the size and complexity of your business and the quality of your books and records. Based on this we will provide you with a comprehensive fee quote specific to your needs.
How do we charge?
As stated there are 3 important elements which differentiate you from the next person:
How large is your business and how complex are your affairs? Are you running a £1m construction company or are you a £50,000 a year subcontractor?
How good are your books and records? Do you have an in house book-keeper who meticulously accounts for every penny, or do you hate bookkeeping and want to outsource this service to an accountant.
Do you need an accountant or a trusted advisor? The preparation of your accounts and tax returns is a legal requirement and this may be all you require. Alternatively, you may want a trusted advisor alongside you to help guide you through the highs and lows of your business venture and to assist with the key decisions to ultimately save you tax and time and to create real wealth.
You are an individual who has specific requirements, and consequently, you need a service unique to you. We also know that the service you require today will not necessarily be the service you require next year. Some things will be addressed now, and then be sorted. But we also know that you are on a journey and there will be new services you require as your situation changes. So if you are looking for an accountant to simply deal with the legals then we may not be a great fit for you.
We want to be your trusted advisor and as a result we build our accountancy fees around you. We have a proposal system that details many of the services we offer. See our video below which goes into more detail about how we arrive at our proposal and the accountancy fees for our corporate clients.
Accountancy fees for the self employed and personal tax cases
Our pricing for our self employed clients and personal tax cases is similar to that for our limited company clients in that our fees are based on the time spent on your affairs and the level of service you require. As stated above for us it is about building strong working relationships with all our clients. It is therefore essential that within our costings we include time to prepare your tax returns and accounts correctly and to take the time out to build a strong relationship. As a result we do have a minimum fee for our self employed and personal tax clients which currently is £1,000 + VAT.
What’s the next step?
We believe we are like your financial doctor. We will prescribe the service you require to keep your financial affairs in good health with our aim to help you save tax, save time and to create real wealth.
How would you feel if you went to your real doctor and said I have a tummy upset and he or she simply said go and take an alka seltzer. We think you would be disappointed and would expect at least a basic health check to find out the underlying causes of your illness and to prescribe something specific to you. So if you expect this for your personal health why not for your financial health?
To give you some idea of accountancy fees have a look at four separate case studies below, which we hope will give you a flavour of what to expect in fees if you were to come to us. But really the only way to find out more about how we can really help you and provide you with a fee quote specific to you is to contact us to arrange your free discovery meeting.
Case Study 1
Are you a startup company? For example a health and safety consultant setting up a company with expected turnover of £60,000 in the first year, one director with one other employee (your partner) who requires accounts preparation, corporation tax return completion, a monthly payroll, two personal tax returns completed, confirmation statement completed, remuneration planning, Xero software subscriptions and telephone support. The books are prepared in house by you on Xero and kept to a good standard.
Typical fee will be £191 + VAT per month (excludes costs of setting up the business usually between £350 + VAT to £500 + VAT).
Case Study 2
Basic Service- Company
A software company with turnover of £200,000, owned by a director with three employees who requires accounts preparation, corporation tax return completion, a monthly payroll, a personal tax return completed, confirmation statement completed, remuneration planning, Xero software subscriptions and telephone support. The books are prepared in house by you on Xero and kept to a good standard.
Typical fee will be £281 + VAT per month
Case Study 3
A building company with turnover of £1,200,000, owned by two directors with three employees and on average 10 subcontractors who requires accounts preparation, corporation tax return completion, a monthly payroll, monthly CIS returns completed, two personal tax returns completed, confirmation statement completed, remuneration planning, pre year end tax planning, monthly book-keeping , Xero software subscriptions, fee protection insurance and telephone support. The books are prepared by us on Xero with the company using the software for billing.
Typical fee will be £872 + VAT per month
Case Study 4
High Growth Business-Company
A building company with turnover of £2,000,000, owned by two directors with five employees and on average 15 subcontractors who requires accounts preparation, corporation tax return completion, a monthly payroll, monthly CIS returns completed, two personal tax returns completed, confirmation statement completed, remuneration planning, pre year end tax planning, monthly book-keeping , Xero software subscriptions, fee protection insurance and telephone support. The books are prepared by us on Xero with the company using the software for billing. Most importantly however the company has big plans to grow to £10m in the next 5 years and want to use us as their Finance Director or CFO and require monthly meetings where we review actuals to budget including key KPIs, cashflow forecasting, discuss goals and objectives, review monthly action plan including review of previous months actions.
A couple with a substantial managed investment portfolio, three rental properties and pensions who require annual rental accounts and self assessment tax return preparation and two annual meetings to discuss tax planning opportunities.
Typical fee will be £125 + VAT per month
As you can see there is a vast range in our accountancy fees as we build a service specific to your needs. You will also notice that in order to avoid surprises we include as standard telephone support and certain advisory services, such as remuneration planning, to ensure that your tax affairs are always tax efficient.
Our fully comprehensive range of services can also include anything from inheritance tax planning, goal setting, budgeting and forecasting, business valuations, assistance with buying and selling businesses, probate services and so much more. Please explore our website to find out more about the services we can provide. When you are ready, contact us either by telephone or by completing the form below to book your discovery meeting.
Book Your Discovery Meeting
Are you hungry for success? If you run a small to medium size business and you want to grow your sales, increase profitability and pay less tax then you have come to the right place.
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